What can be done to kick-start the housing industry, and also make housing more affordable for the poor and middle class buyers? A new book by economists Ed Glaeser and Joseph Gyourko takes on these questions and more. Here’s a blurb from the American Enterprise Institute which commissioned the book:
Even after the burst of the housing bubble, homes remain unaffordable for the poor and the middle class in many parts of the country. In a new NRI-commissioned book, Rethinking Federal Housing Policy: How to Make Housing Plentiful and Affordable (AEI Press, December 2008), Edward L. Glaeser and Joseph Gyourko examine why. They show that local building restrictions are the cause of much of the continued high cost of housing.
Glaeser and Gyourko argue that reform of the home mortgage interest deduction would provide incentives to local governments to reduce these barriers, allowing the market to provide more housing and reducing costs. Additionally, they believe that federal subsidies for the production of low-income housing should be eliminated and the funds reallocated to increase the scope of federal housing voucher programs, which allow poor households to relocate to areas of greater economic promise.
Here’s a link for the PDF of the entire book.